The Truths That Walmart Prices Have Revealed About The US Economy
A study conducted by NPR compared Walmart prices from 2019 to the present, and its findings included that shrinkflation has affected multiple products and that prices rose across most categories due to external factors like the war in Ukraine.
The U.S economy has been in a state of disarray for quite some time. Problems began when the pandemic hit and global supply chains became chaotic. Coupled with erratic fuel prices and Russia’s invasion of Ukraine disrupting the food supply, the country experienced historic inflation. Now, a new study by NPR reveals how these events are still impacting shoppers by examining Walmart prices.
NPR visited a Walmart in Liberty County in December 2022 to see how prices and items have changed since 2019. The first discovery was that shrinkflation is very real across several products. Known as the devious cousin of inflation, the phenomenon hides higher Walmart prices in plain sight by reducing the number of chips in a bag or tissues in a box.
But this isn’t just affecting Walmart prices. It happens at every store which is why shoppers are advised to consider the price per unit to assess changes. Tide detergent and Dove soap stood out as prime shrinkflation examples in the study. A Tide jug that contained 100 ounces of liquid in 2019 now has 92 ounces. And Dove soap bars shrank by a quarter of an ounce. Both items also cost more.
Interestingly, Tide manufacturer Procter & Gamble says retailers like Walmart decide what size package to offer and at what prices. Speaking to NPR, the company said it takes a holistic view of pricing that accounts for several factors. This includes costs, the value of its brands, and local marketplace dynamics. Procter & Gamble will be raising prices in February due to various manufacturing costs.
Although Walmart is focused on keeping prices as stable, the study found that inflation is evident in the store. But this is due to factors beyond the big box giant’s control. For instance, the cost of a Paper Mate mechanical pencil probably increased because a December price tag was compared to the August back-to-school season.
Supply-chain woes also show up in many Walmart aisles, affecting the prices of various items. Wood and wood pulp for paper products were impacted by pandemic demand and the war in Ukraine. Fruits, vegetables, and grains were hit by severe droughts in America which caused prices to soar. Avian flu ravaged egg-laying hens. And aluminum imports have faced a roller coaster of tariffs.
The lingering impacts of Donald Trump’s trade war with China have also caused Walmart prices to increase. “I think that tariffs probably are part of it,” Chad Bown of the Peterson Institute for International Economics told NPR. But he said it’s hard to know the extent. President Biden largely kept taxes on imports from China. But Chinese exporters didn’t respond by lowering prices.
Fortunately, some items at Walmart retained their old prices while others got cheaper. This was largely seen in the electronics department, where oversupply caused stores to slash prices. Additionally, all the products examined by NPR list the same locations as their places since 2019. However, trade economists say new products will likely be sourced from new places, particularly outside China.
